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Ares Capital’s (NASDAQ:ARCC) fourth-quarter profit, based on consensus estimates, is expected to climb both Q/Q and Y/Y as rising interest rates are poised to keep boding well for the business development company, which is slated to publish its results on Feb. 7 before the opening bell.
Q4 core EPS is anticipated to be $0.56, up from the $0.50 recorded in Q3 and from $0.47 a year earlier. Over the last six months, analysts have risen their Q4 earnings expectations by 18.5%.
KBW analyst Ryan Lynch expects ARCC’s Q4 EPS to climb above the consensus, calling for $0.62, he wrote in a Jan. 22 note. That’s despite the BDC’s expectations for a 0.9% decline in book value driven by net portfolio losses.
In the past eight quarters, the company’s earnings have surprised to the upside in every instance except for the March 2022 quarter.
Raymond James analyst Robert Dodd last month maintained his Buy rating on shares of Ares Capital (ARCC) as its recent equity offering “could lower leverage modestly while having no material impact on earnings or our expectations for dividend distributions in 2023,” he wrote in a note dated Jan. 17.
Total investment income is expected to come in at $584.5M, compared with the $537M logged in the prior quarter and $442M from the year-ago quarter.
Seeking Alpha contributor Brad Thomas recently justified ARCC with a Strong Buy rating with shares trading at a sub-10% premium to NAV.
